Tim Hortons USA Inc. v. Singh

ORDER ON MOTION FOR PARTIAL SUMMARY JUDGMENT ON COUNT
V OF THE COUNTERCLAIM (FOR DECLARATORY JUDGMENT
RELIEF)

JONATHAN GOODMAN, UNITED STATES MAGISTRATE JUDGE

Doughnuts
usually make people happy. National Doughnut Day is
celebrated in the United States on the first Friday of June
of each year. Parry Gripp, a singer- songwriter and the lead
vocalist and guitarist for the pop punk bank Nerf Herder,
wrote a song called “One Donut a Day, ” which has
nothing but good things to say about the edible, deep-fried
delight: “One donut a day, and everything's gonna
be okay. Hey! Eat a donut a day, And everything's gonna
be o-o-o-o-o-okay.”[1]

Smithsonian
Magazine published an article in March 1998 entitled
“The History of the Doughnut, ” which explained
that doughnuts were promoted on posters at the 1934's
World's Fair in Chicago as “the food hit of the
Century of Progress.” The article noted that, as of
1998, approximately 10 billion doughnuts were made each year
in the United States.[2] Famed songwriter Irving Berlin penned a
song called “We Made the Doughnuts Over There, ”
in which he explained that “We're the girls who
made the doughnuts for the doughboys over
there.”[3]

And in
an article entitled “Doughnut or Donut? The Great
Spelling Debate of Our Time, ” writer Kristen Aiken
began her piece by proclaiming that “doughnuts have
become an integral part of American culture, loved for
providing us with mouths full of comfort and loathed for
ruining our diets.”[4] Doughnuts have even found their way
into music videos, including one featuring iconic landmark
“Randy's Donuts” in a Justin Timberlake video
for his song “Can't Stop the Feeling.” That
donut store is famous for its giant 32-foot doughnut towering
above its rooftop.[5]

Miami-Dade
County is no exception to the doughnut-loving locales and
recently, on March 30, 2017, hosted a doughnut festival
(called “Donuts!”) in the Wynwood area of Miami.
According to a January 11, 2017 article discussing the
then-upcoming doughnut festival, the 2016 event sold out
quickly, attracting 650 attendees who were provided with 14,
000 doughnuts.[6]

This
lawsuit is about doughnuts. Specifically, it is about a
doughnut franchise agreement. But, despite the
usually-positive, festive atmosphere surrounding doughnuts,
the doughnut operation in this case has not generated much
happiness among the parties to this lawsuit. To the contrary,
the doughnut business at issue here has generated disputes
and bad feelings, not to mention litigation.

This
lawsuit arises from the purported termination of a franchise
agreement, which led to a lawsuit by the franchisor (Tim
Hortons USA Inc., a/k/a “THUSA”) and the landlord
(Tim Donut U.S. Limited, Inc. (“TDUSL”)) against
the franchisee, Panagg Café Incorporated
(“Panagg”), and its three guarantors (Gurvinder
Singh, Ashna Walia and Adarsh Walia). Panagg and its three
guarantors filed a Counterclaim, and Count V of that
Counterclaim seeks a declaratory judgment.

According
to the Counterclaim, THUSA's Notice of Termination was
premature because it was sent one day before expiration of
Panagg's opportunity to cure. Plaintiffs disagree, and
contend that the Notice of Termination was timely and not
premature. Under Plaintiffs' version of events, the
five-day cure period expired on July 12, 2017 because the
Financial Default Notice was sent on July 7, 2016 via email
and overnight delivery. Panagg contends that the cure period
expired on July 13, 2017, which it says means that its July
13, 2016 offer to cure was timely.

Plaintiffs'
motion for partial final summary judgment [ECF No. 60]
targets the declaratory relief sought in Count V of the
Counterclaim. It contends that (1) Panagg received the
Financial Default Notice and had actual knowledge of it on
July 7, 2016; (2) the cure period expired on July 12, 2016;
(3) Panagg did not offer to cure the financial default until
July 13, 2016; and (4) its July 13, 2016 Confirmation of
Termination was timely.

Defendants/Counter-Plaintiffs
argue that the partial summary judgment motion should be
denied for several reasons: (1) the Court should not resolve
the motion because it is intertwined and indivisible with
other claims in both the Amended Complaint and Counterclaim;
(2) THUSA failed to timely provide individual notice to each
of Panagg's representatives and its guarantors; (3) the
Financial Default Notice was improperly sent because it was
issued by email even though the Franchise Agreement provided
for notice by personal delivery or telefax; and (4) THUSA
ignores a course of conduct which constituted an oral payment
plan.

Plaintiffs
challenge these opposition arguments. They say that (1)
partial summary judgment is permissible even it seeks to
resolve less than the entire case; (2) the emailed Financial
Default Notice was sufficient because strict compliance with
the type of notice provided is unnecessary when, as here, the
recipient has actual notice; (3) the guarantors were not
entitled to individual notice as guarantors because they
agreed to waive notice in the guarantee itself; and (4)
although a course of dealing may explain an ambiguous
contract, it may not contravene a contrary express provision
in a contract.

For the
reasons outlined in greater detail below, the Undersigned
grants, but only in part, Plaintiffs'
motion for partial summary judgment on Count V. The specifics
of the ruling, and its limitations, are provided later in the
Order.

Factual
Background

The
Motion and the Inadequate Response

Plaintiffs
filed their summary judgment motion with a Statement of
Material Facts [ECF No. 61]. Panagg and the three guarantors
(i.e., the Counter-Plaintiffs) filed a response and a
Response to Plaintiffs' statement of material facts [ECF
Nos. 68; 69]. But the response to the statement of material
facts is procedurally improper and violates the applicable
local rule.

Plaintiffs'
Statement of Material Facts includes 20 separate facts, in
paragraphs numbered 1 through 20. The
Defendant's/Counter-Plaintiffs' response disputes
some of the 20 alleged facts, but does so in a confusing and
procedurally improper way. For example, numbered paragraph
3 of its response discusses the purportedly
undisputed facts in paragraph 11 of Plaintiffs'
statement of facts, paragraph 9 of their response denies the
statements from paragraph 17, and paragraph 11 denies the
statements from paragraph 19.

In
addition, the Defendants'/Counter-Plaintiff's
response [ECF No. 69, p. 3] included their own additional
facts in the same paragraph and then included a final, all-
encompassing paragraph (number 12)
“incorporating” Singh's declaration “in
its entirety as a statement of material facts[.]” For
example, paragraph 5 of the response admits certain portions
of paragraph 13 and then provides additional
purported facts.

Under
Local Rule 56.1, the Undersigned has authority to deem as
admitted all the facts submitted by Plaintiffs in support of
their partial summary judgment arguments.

As the
plain language of Local Rule 56.1 states, “(a): A
motion for summary judgment and the opposition thereto shall
be accompanied by a statement of material facts as to which
it is contended . . . there does exist a genuine issue to be
tried[.]“ S.D. Fla. L.R. 56.1(a) (emphasis supplied).
The local rule requires that such statement “(1) Not
exceed ten (10) pages in length; (2) Be supported by specific
references to pleadings, depositions, answers to
interrogatories, admissions, and affidavits on file with the
Court; and (3) Consist of separately numbered
paragraphs.“ Id. (emphasis supplied).

The
local rule further provides that “[s]tatements of
material facts submitted in opposition to a motion for
summary judgment shall correspond with the order and with the
paragraph numbering scheme used by the movant[.]” It
also provides that “additional facts which the party
opposing summary judgment contends are material shall be
numbered and placed at the end of the opposing party's
statement of material facts[.]” (emphasis added).

Failure
of a respondent to file a statement of disputed facts, in the
format as required above, causes “[a]ll material facts
set forth in the movant's statement” to be
“deemed admitted unless controverted by the opposing
party's statement[.]” S.D. Fla. L.R. 56.1(b)
(emphasis added).

When a
party properly complies with Local Rule 56.1, it is
relatively easy for a court to determine whether there is a
genuine disputed issue of fact. Basically, all a court needs
to do is to look at the opposing statement of material facts
on a paragraph- by-paragraph basis, see whether any
paragraphs carrying the same number are designated as
disputed and then make note of the evidentiary reasons for
the dispute. If a Court wanted to see if paragrap. 3 of the
summary judgment movant's statement of facts is disputed,
then it would simply and easily turn to numbered paragrap. 3
of the opposition's factual statement.

When a
party does not comply with the Local Rule by using the same
paragraph numbers, however, then it is more difficult for a
court to discern if there is an actual factual dispute
concerning a specific paragraph. A court needs to review the
entire opposing statement to determine whether there
is a sound factual basis for saying that a point deemed
factually undisputed by the movant is actually disputed.
Here, for example, I needed to review paragraph 11 of the
response to the statement of facts to see if paragraph 19 is
being disputed. I should have been able to turn to numbered
paragraph 19 to make that determination, but there is no
numbered paragraph 19 in
Defendants'/Counter-Plaintiffs' response.

This
can be an arduous process, and, in any event, generates
unnecessary work for the court and its staff.

Defendants'/Counter-Plaintiffs'
approach is contrary to the local rule and, in effect,
requires me to do their job. Basically, I needed to review
all numbered paragraphs of their response to see which of
Plaintiffs' numbered paragraphs were being challenged as
disputed.

But
“[j]udges are not like pigs, hunting for truffles
buried in briefs.” United States v. Dunkel,
927 F.2d 955, 956 (7th Cir. 1991); see also Chavez v.
Sec697;y Fla. Dept. of Corr., 647 F.3d 1057, 1061
(11th Cir. 2011) (“judges are not required to ferret
out delectable facts buried in a massive record, like the one
in this case”). The local rule is unambiguous: it
requires the response to carry the same paragraph numbering
system.

So
Defendants/Counter-Plaintiffs did not follow a basic
procedural requirement of Local Rule 56.1. This is
disappointing, to say the least, and the Court undoubtedly
has the discretion to deem all of Plaintiffs' undisputed
facts admitted and then enter partial summary judgment in
Plaintiffs' favor on Count V as Defendants'/Counter-
Plaintiffs' defective response essentially leaves the
Court with “the functional analog of an unopposed
motion for summary judgment.” Lugo v. Carnival
Corp., 154 F.Supp.3d 1341, 1343 (S.D. Fla. 2015)
(admitting facts from defendant's undisputed material
facts statement after reviewing the record based on
plaintiff's violation of Local Rule 56.1); Regions
Bank v. 62' Ocean Sport Fish, No. 13-20966-CIV, 2014
WL 4055707, at *2 (S.D. Fla. Aug. 14, 2014) (admitting
undisputed facts in plaintiff's statement supported by
the record based on defendants' violation of Local Rule
56.1).

Because
Defendants/Counter-Plaintiffs have not filed an acceptable
statement of disputed material facts, the Court, as noted,
could treat all of Plaintiffs' statement of
undisputed facts as true. See Johnson v. Sch. Bd. of
Broward Cty., Case No. 07-60797-CIV, 2008 WL 5427789, at
*2-3 (S.D. Fla. Dec. 30, 2008) (finding local rule requires
that a statement of disputed facts include reference to
supporting evidence and deeming facts disputed by plaintiff
but not supported by record evidence as admitted).

However,
it is clear that Defendants/Counter-Plaintiffs dispute some
facts but basically admit the ones relevant for this motion.
For example, they do not dispute that Gurvinder Singh
(“Singh”) received the two notices of default by
email, forwarded them to his daughter within the hour and
then telephoned THUSA's Director of Franchise Performance
later that same evening.

Therefore,
for all practical purposes,
Defendants'/Counter-Plaintiffs' procedural misstep is
of no legal consequence because they admitted the critical
allegations anyway.

But
Defendants/Counter-Plaintiffs are not the only parties who
committed procedural ...

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